Soffers settle dispute with bank over Las Vegas Fontainebleau

Deutsche Bank Trust Co. Americas and a Soffer family partnership have apparently resolved a $20 million dispute regarding the Fontainebleau Las Vegas.

Jacquelyn Soffer has been substituted as the plaintiff for Deutsche Bank in the case, which would give her the right to collect $19.9 million in principal $705,000 in interest plus attorneys fees in New York State Supreme Court. The $3 billion project was never completed.

Soffer’s brother, Jeffrey, was described by Deutsche Bank as being in control of the partnership and named as a defendant. Jacquelyn Soffer was not.

Lenders, including bankrupt Lehman Brothers, have filed lawsuits alleging Jeff Soffer still owes hundreds of millions for personal guarantees on financing for the stalled hotel/casino/resort complex in Las Vegas, which Carl Icahn purchased for $156 million in January 2010.

The Soffer family and Turnberry also have counterclaims against the Las Vegas resort’s lenders. The counterclaims, which use details from an examiner’s report about the collapse of Lehman, said Lehman hid its true financial condition.

Jeff Soffer signed a settlement agreement with the bank in January, but the counterclaims are still pending.

As part of the agreement, Deutsche Bank “assigned to [Jackie] Soffer all of its rights, title and interest in the causes of action actually asserted in this action, including the right to have judgment entered against the defendants herein.”

A logical question is why would a bank substitute a defendant’s sister in collecting the judgement.

Attempts to obtain an explanation regarding the matter from the Soffers or their spokesman, David Satterfield, were not successful by deadline.

Other attorneys offered several possible reasons: Jackie Soffer might have reached a lower settlement figure with the bank. The family might have wanted to equitably share the financial impact. The switch might be part of a broader legal strategy regarding debts related to the Las Vegas resort.

The judgment for Jackie Soffer was registered with the New York State Supreme Court and signed by Judge Judith Gische on Feb. 16.

The Fontainebleau Las Vegas filed for bankruptcy in 2009. Jeff Soffer, lenders and others involved in the project suffered losses, but Lehman Brothers alleges Soffer still owes it for losses on certain loans.